Three Horses Method

of Innovation Practiced by Unilever

Product Innovation is the Lifeblood of Unilever

Bringing new and innovative products to market for Unilever is a must. Even a successful products lifetime in market can be as little as 2 years before innovation is required. New innovations can be complex to bring to market.

Bringing a New Innovation To Market

Opportunity

Principle Capable

Launch

Bringing a New Innovation To Market

Marketing

Consumer Understanding
Technical View from R&D and Supply Chain Opportunity Launch

Bringing a New Innovation To Market

Marketing Consumer Understanding R&D Finance

Principle

Launch

Engineering Supplier Links Safety, Legal, Environmental

Bringing a New Innovation To Market

Marketing Consumer Understanding R&D Finance Engineering Supplier Links Safety, Legal, Environmental Sales Launch

Capable
Mould Makers

Bringing a New Innovation To Market

Marketing Consumer Understanding R&D Finance Engineering Supplier Links Safety, Legal, Environmental Advertising Agency

Sales
Supply Management

Launch

Mould Makers
Converter Manufacturing Trade/Customer

Portfolio management
At any one time there could be many, many innovation projects underway Resource must be used wisely Unilever uses a gated decision process or funnel to stop failing projects Senior management assumes responsibility and work in a team.

Three Horses Method

Involves all functions - early Teams considers the Possibility of how the New product may fail Explicit stopping rules More unbiased recommendations for gate keepers making stop/go decisions

Three key questions to be addressed for product innovation

Can we do it? Is it technically possible to deliver this opportunity? R&D/ Supply Chain Are the risks involved acceptable? Safety of consumers, workers, environment Reputation External relations

Why do we want to do this? Is this an activity that we would choose to do? Are the opportunities sufficiently attractive? Commercial/Marketing

Typical testing decision gates

Stage 1: What to put into lab testing?
No human contact, e.g. hair swatches

Stage 2: What to put into controlled testing?

Products applied to panellists by trained technicians who assess results

Stage 3: What to put into in-homes testing?

Used by panellist members in their own homes, supported by test centre

Stage 4: What to put into the market?

Free use in market, supported by company care-lines

Preferable situation
If there are killer questions they should be answered as quickly as possible
If the project is destined to fail, best to kill it quickly and release resource for other opportunities

Each stream or horse must be kept in-synch

What are the decision gates? What is the minimum which must be known about any stream before ALL can be approved for progressing further?

Three Horses method

1. Identify the major areas of uncertainty which must be progressed simultaneously to make robust go/no-go decisions
Are the opportunities great enough? Is it technically possible to deliver the opportunity? Are the risks involved acceptable?

2. 3. 4. 5. 6.

What are the risks in each stream those risks which would stop the project Arrange the risks onto a timeline where are answers needed to feed into major go/no-go decisions? Can any tasks to get the answers be scheduled earlier? Draw up action plans to get the answers Check resource implications for project and portfolio

Process
1. What are the major areas of uncertainty, where favourable results are essential before we can progress any further?
Will the formulation fit with potential tools / appliances?

What are the potential side-effects?

How to formulate into a product?

Is there an acceptable business case?

Whats the environmental impact? Will consumers change their habits in order to get the benefit?

How to have a convincing marketing strategy?

Process
2. What are the risks in each work stream?
Can we do it?
Evaluation framework not agreed

Are the risks involved acceptable?

Existing safety data gives bad prognosis for material from literature review

Do we want to do it?
Consumers dont like the concepts for technology approaches Marketing strategy doesnt match the technical requirements for the benefit to be delivered

Product/appliance interaction causes problems e.g. corrosion/ clogging Formulation design rules not defined to ensure product performance After repeated use the benefit is no longer consumer perceivable

New compound reacts with other ingredients to form toxic by-products Safety package available only for product not tool Unexpected safety issues from in-homes testing

Key opinion formers dont like the technology Trade partners unwilling to take a risk on this class of products

Process
3. Arrange risks onto testing decision making timeline
Stage 2: Controlled Expt
Marketing strategy doesnt match technical requirements for the benefit to be delivered Product/appliance interaction causes problems e.g. corrosion/ clogging New compound reacts with other ingredients to form toxic byproducts

Stage 1. Prior testing

Consumers dont like the concepts for technology approaches

Stage 3: Prior to In-homes

Key opinion formers dont like the technology

Stage 4: Prior to Market

Trade partners unwilling to take a risk on this class of products In repeated use the benefit is no longer consumer perceivable

Evaluation framework not agreed

Formulation design rules not defined to ensure product performance Safety package available only for product not tool

Existing safety data gives bad prognosis for material from literature review

Unexpected safety issues from in-homes testing

Process
4. Can any tasks be scheduled earlier?
Stage 2: Controlled Expt
Marketing strategy doesnt match technical requirements for the benefit to be delivered

Stage 1. Prior to testing

Consumers dont like the concepts for technology approaches

Stage 3: Prior to In-homes

Key opinion formers dont like the technology

Stage 4: Prior to Market

Trade partners unwilling to take a risk on this class of products In repeated use the benefit is no longer consumer perceivable

Evaluation framework not agreed

Product/appliance interaction causes problems e.g. corrosion/ clogging

New compound reacts with other ingredients to form toxic byproducts

Formulation design rules not defined to ensure product performance Safety package available only for product not tool

Existing safety data gives bad prognosis for material from literature review

Unexpected safety issues from in-homes testing

Process
5. and 6. Action plans and resource implications
Stage 1. Prior to in-vitro testing
Consumers dont like the concepts for technology approaches

What
Decide on concepts Check with early adopters

Who
Consumer Research

Evaluation framework not agreed

Agree evaluation framework and action standards from in-vitro through to in-homes

Research & Development

Existing safety data gives bad prognosis for material from literature review

Extensive literature search on similar materials

Safety and Environmental Assurance Centre

Advantages of this method

Focuses only on risks high level view Involves all functions - early Makes teams consider how the project can fail Explicit stopping rules More unbiased recommendations for gate keepers making stop/go decisions

An End Result
true

Thank you!